Credit Card Debt Reduction – The snowball Method Explained at Simple Debt Relief

Credit Card Debt Reduction – The snowball Method Explained

Posted by John D on January 20, 2012 Leave a comment (0) Go to comments

Credit card debt can be a major source of stress and anxiety in a persons life. Unfortunately, its all too easy to spend the
money but when youre faced with having to pay those cards off, its a whole different matter.

If youve looked into debt
reduction, you may have heard of something called the snowball method.

This is an effective way of dealing with the debt on your credit cards, that has worked for many people.

The first step in the
snowball method is to write down all the balances on your credit cards, their interest rates and the minimum payments on each.

Add up all the minimum payments and all your other monthly payments and decide how much extra you have left to pay towards your credit card balances.

Now take the card with the
lowest balance and add that extra payment to the minimum payment.

Do this each month until you have paid that card off.

When the first card is paid off, take the amount of the payments you were
making on it and add it to the minimum payment on the remaining card with the lowest balance. Again, make this extra payment
every month until that card is paid off.

Keep doing this for the lowest balance card each month until all your credit cards are paid off. Its surprising how quickly the
payments can snowball (hence, the name).

After you have paid a couple of credit cards off.

Some people prefer to pay off the highest interest rate cards first, since that
will save more interest in the long run. Theres no reason you cant do it this way but many people find it more motivating to
see cards get paid off quicker.

Whichever method you use is up to you. The key is to stick with the plan every month until all
your cards are paid, and resist the temptation to use the cards once theyre paid off.

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